Medicare Prescription Payment Plan

For the first time, beginning in 2025, the prescription drug law, known as the Inflation Reduction Act, requires all Medicare prescription drug plans (Medicare Part D plans) — including both standalone Medicare prescription drug plans and Medicare Advantage plans with prescription drug coverage — to offer enrollees the option to pay out-of-pocket prescription drug costs in the form of capped monthly payments instead of all at once at the pharmacy.

Timeline: Medicare Prescription Payment Plan Implementation (PDF) (July 16, 2024)

Medicare Prescription Payment Plan Part One Guidance

Part one guidance on the Medicare Prescription Payment Plan outlines requirements for Medicare Part D plan sponsors on operational topics such as identifying Medicare Part D enrollees likely to benefit from the program, the opt-in process for Part D enrollees, program participant protections, and the data collection needed to evaluate the program. These requirements apply to the first year of the program, 2025. 

CMS released draft guidance on August 21, 2023, for public comment and published the final guidance on February 29, 2024. 

Fact Sheet: Medicare Prescription Payment Plan Final Part One Guidance (PDF) (February 29, 2024)

Medicare Prescription Payment Plan Final Part One Guidance (PDF) (February 29, 2024)

Public Comments: Medicare Prescription Payment Plan Draft Part One Guidance (ZIP) (submitted by September 20, 2023)

Medicare Prescription Payment Plan Draft Part One Guidance (PDF) (August 21, 2023)

Summary and Sample Calculations technical memo (PDF) (July 17, 2023)

Medicare Prescription Payment Plan Part Two Guidance

Part two guidance on the Medicare Prescription Payment Plan outlines requirements for Medicare Part D plan sponsors on topics related to outreach and education, pharmacy processes, and operational considerations. These requirements apply to the first year of the program, 2025.

CMS released draft guidance on February 15, 2024, for public comment and published the final guidance on July 16, 2024.

Fact Sheet: Medicare Prescription Payment Plan Final Part Two Guidance (PDF) (July 16, 2024)

Medicare Prescription Payment Plan Final Part Two Guidance (PDF) (July 16, 2024)

Public Comments: Medicare Prescription Payment Plan Draft Part Two Guidance (ZIP) (submitted by March 16, 2024)

Medicare Prescription Payment Plan Draft Part Two Guidance (PDF) (February 15, 2024)

Correction - Changes to TrOOP Cost and Calculation of Maximum Monthly Cap Technical Memo (PDF) (December 20, 2024)

Frequently Asked Questions Related to the Medicare Prescription Payment Plan (PDF) (November 15, 2024)

Contract Year 2026 Medicare Advantage and Part D Proposed Rule (CMS-4208-P)

On November 26, 2024, the Centers for Medicare & Medicaid Services (CMS) issued a proposed rule that would revise the Medicare Advantage (MA) Program, Medicare Prescription Drug Benefit Program (Part D), Medicare Cost Plan Program, Programs of All-Inclusive Care for the Elderly (PACE). The proposed rule includes several proposals related to the Inflation Reduction Act (IRA) including Medicare Prescription Payment Plan for CY 2026 and future years. Additional information can be found in the Press Release and Fact Sheet. To review or comment on the CY 2026 MA and Part D proposed rule during its 60-day public comment period, visit the Federal Register. Comments must be submitted no later than January 27, 2025.

Information Collection Requests (ICRs) for the Medicare Prescription Payment Plan